Wednesday, June 21, 2006

American Values #3: Living Within Our Means

Once upon a time, American citizens saved a portion of their income. Likewise, their government was a net creditor to other nations, exporting more than it imported. Over the last fifteen years or so, these conditions are no longer so. The Empire is now a debtor nation, relying upon foreign central banks to accept and hold large numbers of dollars and exporting less than it imports (other than food and weapons, what is the Empire actually producing these days? Wags say that the buying and selling of homes to each other now constitutes the major portion of the country's economy...). Similarly, the US savings rate has fallen from 7.5% to below zero in that time period. The practice of using one's home as an ATM has long been noted as unsustainable, an effect of an asset (real estate) bubble. As with most things, there is usually an unpleasant day of reckoning: in this case, the gradual decline of the dollar relative to other currencies, a very slow--so as not to cause a crash--shift away by the foreign central banks, and a steep rise in foreclosures as interest rates begin their inevitable rise. This will come at a particularly inopportune time: the Empire will need more funds to keep afloat. Let us once again note that this is only the beginning as the Empire and its citizens rediscover reality with an extended visit to the House of Pain: Social Security and Medicare are going to begin paying out more than they take in as the bulging Boomer generation retires in a financial fog, believing that a magical, mythical pension will appear and take care of them. Chaos believes that this generation still has lessons to (re)learn, particularly about getting something for nothing and "old fashioned" values like thrift.

3 comments:

Pain said...

And all this,

in your own,

human lifetime.

I salute you for your clarity!

Debt,

coupled with the greed of

Citicorp,

MBNA,

and Capitol One,

in America,

will do more to foment,

terror,

than one thousand,

mujehedeen!

And may I suggest,

American Theocracy,

by Kevin Phillips as your

Hurricane Season '06

book of choice!

Qu'ul cuda praedex nihil!

Pain

Chaos said...

Chaos is honored to converse once again with the denizens of Hell, and agrees heartily with Pain that the coming decades will be fascinating indeed, but perhaps better watched from afar. American Theocracy is a fine snapshot of the Empire at this very moment...

Anonymous said...

Oh what? A doomer poet now?

-Denizen of the Valley Formerly Known as Hell Until it Was Forced to Rename Itself Commerce for Tourism Reasons